Carlton's profits for the six months to March 31 were up from last year's loss of £179.4m, a figure that included losses from ITV Digital, which closed in early May 2002. The rise in profits came despite a 3% fall in total turnover to £509m. Carlton said it has focused on careful cost control across the group.
Earnings before interest, tax and amortisation rose 50% to £42m from £28m last time. A strong box office performance boosted its cinema advertising business, which saw revenues up 15% to £37m.
Carlton chairman Michael Green said: "Our profits are significantly ahead of last year. We've improved the performance of ITV. We've reduced costs throughout the business. Our merger with Granada is on schedule."
He added: "The proposed merger with Granada is currently with the Competition Commission, which has outlined to us the issues raised by further consolidation of ITV and will present its report to the government on June 25. We believe the merger has clear benefits for shareholders, advertisers and viewers."
Carlton shares were up by more than 11% in early trading, but fell back to 9.23% by 9:15 to 121.5p, building on gains made yesterday when ITV partner Granada reported profits up 35% to £65m. This morning, Granada was also enjoying gains, up almost 5% to 82p.
Carlton's share of total ITV advertising revenue was up 1.2%, which is being seen as positive in a period that saw the war in Iraq swiftly followed by the outbreak of SARS in South East Asia and Canada and continued softness in advertising demand.
Green said the advertising growth was partly due to investment in programming. However, he said that ad revenue for the nine months was currently anticipated to be down around 1%, reflecting the World Cup revenue benefit in May and June last year.
Green also confirmed that Carlton and Granada are consolidating ownership of the ITV News Channel and buying out NTL.
Carlton Screen Advertising's revenue in the UK and the Republic of Ireland in the first six months saw revenues increase by 15% to £37m, helped by strong feature film releases in the autumn, including the latest 'Harry Potter', 'Lord of the Rings' and Bond movies.
The appointment to the board of McGrath comes ahead of the Carlton's £2.6bn merger with Granada, which is currently being looked at by the Competition Commission.
The move is designed to strengthen the broadcaster's board and win it support in the City, which has been critical of the management of both ITV companies and there have been calls for either Green or Granada chairman Charles Allen to step down, or for more big-hitting outside board members to be brought in. McGrath is also the former chief executive of Diageo and he joins the board as a non-executive director.
McGrath, 64, has spent the last five-and-a-half years with The Boots Company, where he was appointed a director in 1997 and became chairman in August 2000.
Prior to this, he was group chief executive of drinks giant Diageo until his retirement in 2000, and was group chief executive of Grand Metropolitan, before GrandMet and Guinness merged in 1997 to form Diageo.
He has held a number of senior positions at International Distillers and Vintners, GrandMet's spirit and wines business, including managing director, chief executive and chairman.
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